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before i buy QuickBooks, is there something better?
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tigger
Posted 1/12/2021 20:15 (#8746369 - in reply to #8744682)
Subject: RE: before i buy QuickBooks, is there something better?


Iowa
A spreadsheet can be bare bones cash income and expense or as full of management features or as one is inclined to make it. My CPA specializes in farm taxes and has farmer clients with several different accounting programs including quickbooks. He said, of all his clients, he would most like to see me get audited if he had a choice because I seemed to most easily produce clear reports with the needed information, and can back it up with receipts whenever there is a question. I usually email to him the tax related reports from my spreadsheet prior to our meeting so most of our meeting is about tax planning rather than explaining what the income and expense is.

An accounting program can do a lot more than put out some numbers for the CPA to look at for tax purposes. My CPA only sees a small fraction of what is there. My accounting spreadsheet started as simple double entry accounting for tax purposes and kept a running totals for deposits, disbursements, and the checking account as well as individual transactions for each account. Some of the things I've added and found useful to have tied in with the accounting package are as follows:

-Accrual based beginning and ending balance sheets along with net income and equity statements that explain to the penny the difference between the two balance sheets.
-An income statement that can be used to split the whole farm income and expense between profit centers.
-List of depreciable capital assets that feeds into the financial statements.
-Cash flow statement that automatically updates as the year goes on and tracks the differences with the cash flow budget.
-A section to reconcile bank balances with checks and deposits in transit.
-Check and deposit printing (gets it recorded in one shot and eliminates transposing errors).
-A few forms for invoices, business envelopes, and letterheads.
-Contact lists including addresses that will feed into the envelope, check writing template, and letterhead (I hate writing addresses on envelopes by hand).
-Annual historical data of financial statements, financial analysis, production numbers average market prices (basic general ledger tracks these automatically), family living expense, spedial notations, and whatever else you want to record. You can see some interesting trends with several years of that data on the same page.
-Crop field and whole farm crop budgets with break even price and net income projections.
-Crop and field harvest totals that can be used to update the budgets.
-Marketing plans with crop inventories by crop year from the general ledger.
-Seed and chemical program field allocations (handy when working with agronomist and seed dealers).
-Livestock killsheet and closeout P&L worksheet for each group.
-Historical livestock cloesout data (again, this helps to spot trends that can be charted or graphed if desired).
-tracking portfolio of cash investments from ledger transactions that feeds back into the balance sheets (could be done for loan portfolio too).
-a sheet to track taxable income & expense near the end of the year to hit taxable income target.

All of this is on one spreadsheet workbook and can be accessed with one or two clicks of the mouse. It's only one file to back up. It did not take a whole lot of skill or brains on my part to do it. I probably don't know 10% of what can be done with a spreadsheet. It's set up specifically for my operation and works well, but it would need a lot of modifications to work on other farms that are set up differently. All of this could be done with pencil and paper too, but I like having it in one file, searchable and accessible with one or two clicks of a mouse, and a computer doing the math for me. This is the sort of stuff I'd be looking for in accounting software. Regardless of what you get, it will take time to learn and a real commitment to input the data on a timely basis.

Sorry for the long post. The accounting aspect of farming is something I enjoy. It's like building an engine and watching it run.

Edited by tigger 1/12/2021 21:05
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